Evil UNMASKED!! Conman & Hypocrite, Paul Bolte

This post gives more details of the history of a highly talented Aussie conman Paul Bolte, currently located in the USA and masquerading as an ethical Christian motivational speaker & CEO of integrity in a business involving trust. This post follows my recent claims in a previous post (and a chapter of my latest book Evil UNMASKED!!) that his true character is less than savoury. Enjoy.

Claiming that a supposedly honest businessman is actually a hypocritical crook, is a potential defamatory action. It will also (usually) engender a response, of some sort. Of course nothing will happen if the claim is true, because the truth is one of the primary defences of defamation. That’s also one of the main reasons why they all threaten litigation, but never actually DO anything about us truth-tellers telling the truth. Deceivers can’t stand to see their lies come out in public!

Paul now has another career in the international gifting support business but my interactions with Paul Bolte and Bartercard go back a long way, actually a very l-o-n-g way! I can summarise a million words of blogging about these kinda dudes and this business in two words . . . they’re crooks. Logically, you can’t excel in a crooked environment if you’re straight, let alone live in it. One bee can’t change the genetics of the Queen, no matter how smart it is! Paul convinced many that he was straight, yet sold a crooked product! Pas possible, mon amis!

My relation to and involvement with Bartercard goes back many years before Paul took over the New Zealand operation, in fact I was using NZ Barter and the Green Dollar before Bartercard was even conceptualised. I was actually in the process of buying the Fiji national franchise from Kerry Gordon when we only had 300 members in NZ, and Cnl Rabuka ‘did his [political] thing’ which caused me to revise my plans.

Paul didn’t know this at the time but I had just entered into an agreement with Bartercard in the Auckland High Court following Jon Olphert’s loss in their attempted litigation against me. In this written agreement they acknowledged that I had every legal right to trade with their members; that they would cease attempting to influence others not to deal with me, and they agreed to give me a fees-free membership – for life. They also asked that I would never attempt to encourage their members to break their membership rules, which of course I had never had done, nor would ever do, so this was fine by me.

There was some argey-bargey with their management who breached this agreement multiple times (“you can’t trade with our members!”- “Oh yes I can!” sort of thing) and Paul Bolte got involved in the beginning of his tenure. Paul didn’t know about the agreement; he didn’t like the agreement [obviously] and tried to get out of it by offering me patronising advice along the lines of, “Let it go. Shit happens sometimes. You’ll eat yourself up inside if you don’t get pragmatic!”

When this didn’t work, and I said, “Sorry Paul! I require that your company just honours our agreement!” he was gracious enough to recognise that it was my choice and that his company had agreed to something. He did the honourable thing at the time and sorted the problem out as I asked.

That was my first encounter with this dude. I would call it a balanced engagement. He didn’t like what he had to do, and obviously resented being rebuffed at his attempted personal rebuke, and he sure as eggs couldn’t understand the way a man of principle worked when he was much more pragmatic, but eventually we negotiated our way through a business and personal challenge.

My next encounter was at a church men’s group breakfast event where Paul was a visiting motivational speaker. In the West, Christian and male leadership as a rule has taken a dive, both in ethics and standing, and Paul was brought in as an example of a supposedly strong Christian leader in business. Faith and business has now become a major topic, but back then the resurgence of Christian male leadership, particularly believing that the marketplace is a valid ministry was somewhat ‘alternative’.

Wyn Fountain (who wrote the Foreword to my book Lipstick on a Pig) showed how the sound ethics of Christian faith had dissolved from the heady days of a century ago when the likes of Robert Laidlaw (founder of the entity that eventually merged into the Farmers Trading Company) plied his faith-filled management journey. Paul was young in his speaking career at the time that he spoke, but I noted a difference between his subtle but naked aggression in the business environment and his presentation of integrity in business to the faith community.

This two-faced approach is a ‘tell’ to investigators and usually develops as the conman is later exposed. It’s at the same level as a woman who senses a little unnatural attention from her husband to another woman. It may not have developed to a point of action yet, but she instinctively knows that she has a potential problem on her hands. Likewise with me observing this speaker – knowing the other side to what he was saying in public. Nothing overt yet, but enough for me to know, like that hypothetical wise woman above, that the conman was there.

In 2009 I had emmigrated to Samoa and my career as a Private Investigative Blogger had just started, investigating and exposing another Australian conman, Daniel Mensi Evans, of Ormita infamy. Born another name [David James Anthony Harlow] and assuming multiple entities and countries of residence over the years my book The Ormita Report took me and my investigations deep into the world of commercial barter – Bartercard’s unethical involvement with the crooked international (but primarily US) organisation IRTA, its alcohol loving President at the time and utterly incompetent CEO Ron Whitney ending up as a central aspect of my exposure of global crookery in the alternative currency sector.

Paul had moved his operations to the USA and as with many attempting to take business there struggled to adjust somewhat, before they pulled the plug on him a couple of years ago. But while one can use logic to assume that Paul’s inside knowledge of the true nature of the Bartercard’s rapidly devaluing currency was fraudulent, Paul slipped up once and I got the evidence I had waited many long years for when investigating Bartercard’s actions in the UK.

Paul had let it slip to a disenfranchised franchisee that their secret was in their capacity to deal with [conceal] debt. For commercial reasons I cannot share the exact words, nor who supplied me this affidavit, nor the circumstances, but the essence of this was that I finally had the legal proof (i.e. sufficient to stand up in open court under cross examination if needs be) that Paul Bolte knew that his business was profiting from deception.

So as Paul found out that I wished to talk to him, we engaged again, but ‘nothing eventuated’. Funny how one can travel the world, buy and sell and present yourself as a man of integrity to all and sundry, yet cannot arrange to speak to a Private Investigative Blogger eh?

Paul Bolte is a crook and a hypocrite personally profiting handsomely from the selling of a dodgy system to people who will lose money as a direct result of his words and actions. Call this what you will – pragmatism; the way of the world; hypocrisy or whatever – to me it’s simply evil.

The kind (but naive) words

Before giving you commentary on Paul’s own words and speak to him directly, let’s extract some words of the people who have issued glowing endorsements. The following glowing testimonials are quoted from Paul’s latest LinkedIn testimonial section.

Elaine French, 2019, Paul worked with Elaine in the same group

Paul is a man of integrity, character and a “get it done!” attitude . . . My personal communication with Paul always placed him at the very top of the pack . . . It was Paul Bolte that stepped up. He prayed for me, helped me . . . Paul’s Christlike attitude will remain with me forever . . . He is not only exceptional with people but he is a leader worth following.

Elaine, sadly you have been deceived and you need to exercise more discernment and probably cease to give testimonials, certainly until you have matured enormously in this area. Paul has the gift of the gab. He knows how to reach out and help others. He is intuitive, intelligent, works hard (“gets it done!” as you say) and presents himself well – very well in fact. There is however another side to Paul, one that his ex-wife and kids and his crooked co-conspirators and their victims also know only too well. No one except the Master is worth following Elaine . . . no one.

Geoff Lorigan, 2018, Geoff was Paul’s teacher

I have known Paul Bolte since 2011 when he attended our Strategic Leadership Programme at Millbrook. Paul has impressed me as a talented, strategic CEO who makes things happen fast and to perfection. I have found him to be a man of integrity whom one can trust and rely on.

Geoff, that may be so, but have you ever challenged Paul effectively, like I have, on matters of business integrity? It is not possible to operate within the confines of a crooked company, with a dishonest product and alongside of skilled manipulators of the highest level in business, and to do this for years without knowing the truth. Your student duped you Geoff. Your first analysis is correct. Your second however misleads the public.

Josh Walters, 2018, Josh was Paul’s mentor

Paul has been such a gift to our organization . . . Appreciating the work ethic, processes and products of today while helping us see what tomorrow could look like. I think I’ve had 100 such “What if…” conversations with Paul around every aspect of what we do. He is always thinking about engaging our primary customer, how we could throw open the front door, close the back door and help people grow while they are here. Paul brings decades of professional experience and serves with the kind of character and integrity that will raise standards. I would recommend Paul without reservation.

If Josh was a crooked business leader and we took out the word “integrity” from this testimonial I could agree, but this is a Pastor talking about godliness, and integrity. Josh, Paul has extensive business experience and is an immensely strong leader of people. He is a top achiever in business, but he is a child when it comes to things of the Lord, such as integrity and while I have no personal knowledge of why he has such a stunted character development, I would withdraw your unreserved recommendation immediately. Paul is a hypocrite and a highly accomplished conman.

Jason Walter, 2018, Jason was Paul’s mentor

I’ve gotten to know Paul through a CEO mastermind group I’m involved with over the past 2 years. I can say from experience that Paul is one of the strongest leaders I’ve ever met. His thinking is very strategic and his managerial skills inspire others to be be great! I’ve become a better leader by learning from Paul.

I concur entirely with this testimonial. I too have learned some very valuable lessons from conmen from all over the globe, including Paul. Some of it is what not to do.

Trevor Dietz, 2018, Trevor managed Paul directly

I have known Paul for more than a decade – many of those years in a direct reporting relationship. He is a clear thinker who can lead individuals, teams and Boards to achieve great success and deliver both the Vision and Mission of the business.

I too have known both Paul AND Trevor Dietz for this length of time and more in Trevor’s case.

He [Paul] is a man of his word, is regarded by his peers as a person with the highest of personal ideals and standards. Paul does not require supervision once given the direction and outcomes that he must achieve. Always respectful of all parties he is quality speaker at conferences delivering clear, concise and motivating presentations . . .

Trevor, like Paul, is a crook. As a Senior Board Member, owner and employer of Paul, Trevor is one of the three “Smiles in Suits” that conceptualised the entire Bartercard con job. What is notable here is not Trevor’s endorsement but what is not said is the nature of this back-scratching. As one crook smiles at another and tells the world that the other guy is good at something, the concept of integrity, the law, truth and justice are avoided – for good reason. Oh and by the way Trev, how’s that defamation lawsuit coming on, you know the one that you told the world many years ago that Bartercard had actually commenced in multiple jurisdictions? Remember? I’m still ready and waiting for that first summons!

Steve McCullough, 2018, Steve was Paul’s mentor

I have gotten to know Paul over the last 5 years and can say that he is one of the very best and most principled CEOs I have had the privilege of working with.

Hmm, Steve, Steve, Steve!

Paul has a gift of communication and administration. He operates with excellence in all he does and has abundant capacity.

Yes, indeed. I concur.

Bill T.Senior , 2017, Bill reported directly to Paul

As a current Bartercardusa franchise owner and 30-year entrepreneur owning multiple businesses in many industries, I feel I am qualified to endorse both Bartercardusa and Paul the president and CEO.

Hi Bill! How’s Bartercard USA going for you now? Still close with Paul and endorsing him, I assume without reservation?

His leadership qualities rival that of the top CEO’s in the world and has proven it over and over in his career at Bartercard. He opened the USA market which is now projected to become the largest market in the world for Bartercard.

Umm, have Bartercard repaid their large debt with IRTA’s currency? Arrr, where is Bartercard USA now? Hmmm!

His core leadership skills include integrity, honesty, respect, and complete transparency with not only his teams but with the 1000’s of business owners that are part of the Bartercard network throughout the world.

Methinks that this testimonial giver may have changed his tune a little!

Tony Wiese [Governor of the Qoin Reserve] , 2014, Tony worked with Paul in different groups

Paul migrated from Australia and became CEO of Bartercard New Zealand for 5 years where he generated exciting growth in the business as well as in the people. Paul is a people focused leader and enjoys to work with their aligned values to help them achieve their goals. Due to this dedicated focus on building business through people Paul was asked to kick-start the USA business for the Bartercard International Group. In a short time he had all the legalities, systems and processes implemented and their first few franchise partners are already established. I recommend Paul to achieve a healthy franchise footprint in the USA, based on his proven success elsewhere and his outstanding leadership skills.

How’s Tony these days? Qoin working out well for you, I bet? And Bartercard USA? Why does the concept that there is no honour among thieves ring in my ears here when your name pops up on my screen, Tony?

Please let me reiterate . . . the cognitive dissonance that exists when on the one hand someone sells something that they know is crooked, and works for and alongside of crooks yet at the same time presents themselves as something that they are not to another [primarily Christian] community is either a mark of the psychiatric or the conman. This describes Paul Bolte to a tee – the ultimate in professionalism and very, very careful to give the appearance of integrity yet simultaneously “doing the dirty” on others.

The Bartercard currency is fraudulent when it is claimed that it’s value equates to the local currency. It doesn’t – by a long shot and by design and by dishonest conduct. The principals themselves (including most working within the organisation) buy, sell and trade currencies, businesses, ‘opportunities’, goods & services dishonestly and this has been the case since its inception. No person who has worked for this outfit and its various iterations for any length of time cannot know this.

I also have proof that Paul Bolte specifically, does.

Paul, there is hope, but the price for you (as you know) is too high for you to pay it. Personally I wish that you return all your ill-gotten gain to whom you got it from and fess-up. You and I both know that this is nigh on impossible and certainly impractical, therefore you have gotten away with it all these years.

The point here Paul is that in many ways we are actually both the same – we’re both leaders of people, visionaries and take people with us whereever we want to ‘go’. The difference between us Paul is that I admit that I’m a self-interested dude with an agenda to tell the world about ‘whatever’ tickles my fancy. I tell people that I’m an obnoxious [professional] arsehole that never gives up when on a case, ever, because I know this is true. You though, present yourself as a good guy when you’re not. I know this and am a threat to you and your ‘castle’. Sadly, you actually believe your own ego – and that has been your downfall.

So this leaves you with two known issues to deal with – me as a representative of the rest of the people and your Creator. You are too slippery and ‘up yourself’ to talk to me, because you know that I know that you know that I know. The price is too high for you to even risk speaking the truth, especially to me so that leaves only your Creator to deal with. Pray then that He is a merciful God who understands, because if I know who you really are, then sure as eggs you can’t fool Him!

In the meantime as always, those who do the due diligence and who humbly apply logic onto fact will (in the end) get to the truth. Exercise caution, extreme caution – wolves, sheep’s clothing and so on. You’ll get there if you’re reading this. Back yourself in humility, especially if your gut is speaking to you.

And there is the ‘rub’ folks – pride. We can deceive our fellow man (and women) as Paul does, until we cross swords with a pesky little blogger downunder who has the proverbial to say it, but when we deceive ourselves, thinking that we are able to get away with our crimes before God, well that’s just stupid. It’s only pride – ours!

The Bartercard thing

Now onto the details that led up to and the critical meeting I conducted with Paul Bolte regarding the Auckland High Court case that Bartercard lost against me. Technically Bartercard’s lawyer sought to reach agreement immediately following an adjournment for lunch on the first day after the judge said essentially, “Mr Olphert, the matter is nothing like you have presented to the court at all. This man has only done what you say he can do in your own terms. You don’t have a case!” I’ve quoted his actual words below.

I met with Paul, filled him in on the matters (new to him) and as I always do summarised our meeting. Paul acknowledged receipt of all of this and, as I have said, acquiesced to my request that they honour our agreement.

Dennis A Smith <[redacted]> 5 December 2008 at 18:30

To: Paul Bolte <[redacted]>

Hi Paul

Thank you for your time today and I understand perfectly well that this is all new to you. I will get a copy of the agreement up to you as soon as I get my hands on it.

A wrap-up of the past (the “short version”) as you asked for today follows, but with a little more clarity (a part of the “long version” is at the footer of this email. I think it’s actually worthy of a read as it highlights some issues that BC may still have in some grey areas!):

1. I have been a pro-active member of all (and shareholder of some) trade organisations operating in New Zealand for over 20 years – Green Dollar, NZ Barter, IBEX, BBX, TradeCard, Ozone NZ and Ozone Australia/Ormita. I still have a mass of contact with members from many exchanges, including communication with the owners and managers of some new exchanges. I’m a natural trader – creative and passionate.
2. I joined Bartercard in the early 1990s when we had 300 members and personally welcomed and encouraged many new members when they joined.
3. I was in the process of buying the Bartercard license for Fiji from Kerry Gordon when Cnl Rambukka intereferred in our business plans and the deal was held off
4. My original dispute with Bartercard involved a breach of agreement by one of the then staff that caused cash loss of some $3,000. I warned them clearly that I would not suffer loss as a result of their breach, then took BC to the small claims and effectively “won” the case when they finally agreed to do the honourable thing which was all that I was asking fro from the outset.
5. In the process of sorting the matter out BC terminated my account, using a technicality, as they had forced us into a position where we had to direct trade in order to honour commitments. They had a legal right to do this, but this was done in bad-faith – a personal issue I believe from somebody who probably didn’t like losing a court case. I never pressed the issue, but instead continued to trade with members from outside the system, using contra, direct payments and Gift Vouchers as a form of income.
6. BC’s attempt at an injunction to stop us trading with BC members failed. BC’s claim was that:

a) We misrepresented our position in regards to Bartercard
b) We could not accept Trade Dollars, and
c) BC were denied fees

7. I successfully defended the subsequent court case against me personally and Go Kiwi Internet the company, with the matters identified clearly by the judge at the time in our favour
8. After almost two hours in the court hearing, the hearing (scheduled for three days) was abandoned after the judge informed Jon Olphert that effectively “he had no case against us” with the words “Mr Olphert, this case is nothing at all like you have presented to the court”. The agreement was then reached and signed. I believe that the details of the matter were hushed up within Bartercard circles. I would be very surprised if Tony knew anything other than (as you said today) “An agreement was reached”.
9. There is more – I’ve had opportunity to join in with less than happy with BC members gripes and haven’t. I’ve been tempted (and encouraged by several) to “go public” with the case by way of blogging or gossip website but have resisted the urge because I prefer to leave courts and negative things to the last resort. I’ve had opportunity to prospect into the BC membership for several forms of new business and haven’t. I’ve entered into business relationships with BC members who could have easily transferred business outside of the system to avoid fees but I have insisted on utmost integrity when dealing the BC trade dollars and BC members. I’ve been disadvantaged by BC staff many times over the time during and post the court cases, but have only responded recently when your current staff acted as they have done. It can on and on, but you get the picture I’m sure . . .

Today, we never actually detailed what I am seeking as a result of my contact with you. Yes, in general it is for your people to honour the agreement, as I do not want to be disadvantaged through no fault of my own.

Specifically, this will include:

* Notes in your system to the effect that I owe money, when I don’t should be removed/moderated.
* Staff should be made aware of the agreement BC has with me and what this entails for them in their relationship with me and those associated with me.
* Comments from your staff to your members that I am simply trying to avoid membership fees should stop.
* Active interference from your staff when your members conduct business with me must stop.
* An apology would also help make the troubles of the last few months a little more digestible!

Not a big ask methinks. I’m sure these will not be too much of an issue for you. I’m not after blood. I just want a level playing field.

The second two matters, which we parked (Bartercard’s involvement with Internet UNMASKED!! and potential Bartercard membership) are open for discussion at any time, but obviously need to be commercially attractive. At this stage for various reasons, BC membership for two of my operations (Go Kiwi Internet or WDANZ) is not attractive.

Working constructively with other products or services (such as Internet UNMASKED!!) could perhaps be made to work but would need a lot more engagement to find a way through. The last time I spoke to your marketing lady, she seemed to have little interest, even though I believe that IU would be a perfect opportunity to create a win-win for us both.

Your comments along the lines of getting to a point of “letting the things of the past go” are noted as I am of course pretty bitter about the substantial losses caused by the issues with your predecessors.

I also understand your concern with me mentioning Debbie’s meeting with you, however I understood from her that you had actually met with her and spoke with her in person, not just in a public setting. Sorry for any confusion or misunderstanding. No personal matters need be ever discussed in a business situation.

At the footer of this email I have attached the full defence which was in the process of being used in the court case when it was abandoned. It raises issues that BC obviously still has which relate to trade conducted outside of the membership system. BC has always had issues in this area and has been quite precious and litigious in the past but with multiple court failures and in my opinion a lot of unnecessary bad-will.

My questionning of Tony Dowse on the witness stand, while unskilled, did manage to raise the core issues and points covered in my opening presentation, and were subsequently endorsed by the judge, which of course led to Jon Olphert’s urgent desire to settle at lunch on the first day. This was my opening presentation, and contains the essence of our position:

Your Honour, the Plaintiff’s case appears to contain three assertions.

First, that my company or I have misrepresented our business relationship with Bartercard when we have dealt with Bartercard members.
Secondly, that we have no right to trade with their members when their members use their Bartercard credits to obtain goods or services for payment of our account, and
Thirdly as a consequence of our conducting business with their members, they have missed out on fees due to them.

With regards to the first point (misrepresentation), I will demonstrate that there has never been any misrepresentation – not even once in more than two years since our Bartercard membership ended. But more important than just the absence of any proof of the Plaintiff’s claim, you will see that we have consistently and clearly gone out of our way to present the true situation to any Bartercard member wishing to deal with us. We have done this both verbally and in writing, prior to doing business with every single prospective client the moment that they have identified themselves to be a Bartercard member. In fact it would be difficult to imagine how it could be made clearer to a prospective client that we were not members of Bartercard!

With regards to the second point (that we have no right to do business with their members), I will demonstrate that not only is it perfectly legal for an ex-member to trade with a Bartercard member in the manner that we have done since leaving Bartercard, but that the Plaintiff actively encourages their members to trade in this manner, making a real mockery of their claims against us of foul play! Furthermore I will explain why their concerns over their Members trading with us should be addressed to their own Members, not us, because ultimately it is their Members who choose to use their Bartercard trade credits with us. We cannot force or coerce their Members to do anything outside of their will.

With regards to the third point (their claimed loss of fees), I will demonstrate that Bartercard have deliberately put themselves in the position they find themselves in, whereby they have consistently chosen to eliminate us from the membership loop, and the fact that they find themselves missing out on potential fees on business that we do with their members has been a matter of their choice – not something imposed upon them by us setting out to deny them of their rightful fees.

In my representations I will contend that it is not sufficient just to say “We could have had fees from a particular transaction, if he was a member”. I will contend that in order to be entitled to those fees the Plaintiff needs to produce a contract previously agreed to by us in which those fees are agreed to – the amount, form of payment and terms of trade, which they haven’t been able to do because there never has been one. I will demonstrate that the contract between the Plaintiff and us did exist while we were members of Bartercard, but that upon termination of our Bartercard membership, no such contract has been agreed to. You will see that the Bartercard Trading Rules govern the actions of members within the Bartercard Trading system. Non-members (like us) obviously can’t be a party to these internal Trading Rules as we cannot possibly be required to know something that is private contract between the Plaintiff and their members.

I will therefore demonstrate that the Plaintiff is actually taking action against the wrong people. In essence I claim that if Bartercard have an issue with the conduct of their own members, they should discipline their members, not take issue with a third party supplier.

I will also demonstrate that every single member who has chosen to do business with us clearly wanted to do business with us – and not any other Bartercard member – regardless of our membership status; that they wanted to use their Trade Credits to obtain goods and services from us; and that the claim that “Bartercard are being denied their rightful fees” is totally unfounded.

It will also become clear that, we have on no less than four distinct occasions in the last two years sought an amicable resolution to the Plaintiff’s concerns, so that we could become Bartercard members, and trade in the same manner as every other member. I will claim that every one of our attempts to reinstate membership over two years resulted in the Plaintiffs rejecting this possibility out of hand.

I will demonstrate that with the Plaintiff attempting to deny our goods and services to Bartercard members, this has the net effect of actually reducing Bartercard turnover and subsequently the fees due to Bartercard, which in fact is the total opposite to what Bartercard is claiming.

I will demonstrate that not only is it perfectly possible for a non-member to receive remuneration from a Bartercard member, but that the practice of using Trade Credits and Gift Vouchers with suppliers outside of Bartercard membership has long been actively encouraged by Bartercard themselves because it has the obvious effect of assisting members to use their Trade Credits and therefore increases Bartercard’s turnover in the process.

I will demonstrate that the Plaintiff has continued to attempt to exert influence on its own members – often to their own members’ disadvantage, when their members have been dealing with us.

Given that the Plaintiff actively encourages the use of Trade Credits for purchases from non-members, and that by attempting to deny us the opportunity to trade with their members they are then actually shooting themselves in the foot, the question of the real motive for this legal action arises.

I will demonstrate that the Plaintiff has

1.    Undertaken a concerted war of intimidation towards us through our clients,
2.    Interfered with our natural business relationships,
3.    Attempted to prevent us receiving remuneration that we were rightly entitled to and by attempting to coerce members away from conducting business with us.

I will contend that the real concern the Plaintiff has is neither misrepresentation, nor the matter of fees, it is actually a concern that if it became publicly known that non-members can actually trade legally with Bartercard Members then there may be many unhappy members who would leave Bartercard Membership and do the same as us.

I will contend that this attempt to “close down” our business with Bartercard members is more of a desperate effort to set a precedent and to prevent the word getting out than it is based on any actual merit of the case. In other words I will contend that the Plaintiff’s are “just giving it a go” to close down a smaller potentially damaging business, but with no real hope of success.

With regards the Plaintiff’s application for an injunction to prevent us trading with Bartercard members in the future, I will demonstrate that the relief sought has been hardly well thought through by the Plaintiff or their legal team. Apart from being unjustified I will demonstrate that it is an impractical solution and I will raise serious questions about the interpretation and enforcement of the injunction they seek.

In summary I will demonstrate that because we have traded openly and honestly at all times, that because the manner in which we have traded with the Plaintiff’s members has been legal and ethical, and that because there has been no loss of fees due to the Plaintiff, there are no grounds for any injunction.

I will contend that the Plaintiff simply has no grounds for this case whatsoever, and it should be dismissed.

Thanks for your “in-principle” agreement to honour the agreement today, obviously once a copy is furnished. I look forward to a positive resolution of the matters.

—
Regards
– – – – – – – – – – – – –
Dennis Smith
Mobile: 021 WEBSITES (021 932-748)
DDI: (09) 489-2344
Postal: P O Box 101-470, North Shore, 0745
www.dennis.co.nz

Some of the long version”I:

STATEMENT OF DEFENCE

The First Defendant says:

1.    I am the Managing Director of the Second Defendant (“GKI”)

STATUS OF THE FIRST DEFENDANT

2.    I have at all times acted as a representative of the Second Defendant and at no time have I acted outside of this capacity
3.    All fax communications from GKI have been on company letterhead, with me clearly identified as the Managing Director of GKI
4.    All e-mail communications from GKI have contained a signature file, with me clearly identified as the Managing Director of GKI
5.    In all face to face communications my business card clearly states Dennis Smith , Managing Director, Go Kiwi Internet 2000 Ltd and is always supplied to another business person with only a few exceptions when the meeting was not planned, or I had previously given my card to the business person
6.    In all telephone conversations I always identify myself as “Dennis, from Go Kiwi Internet”
7.    In all voice communications by answerphone including messages left for others, and my own answerphone I include the terminology “Dennis, from Go Kiwi Internet”

STATUS OF THE PLAINTIFF

8.    The Plaintiff (“BC”) has failed to prove that they have properly inherited the rights to take action against us in that the Sale and Purchase agreement has critical information missing – in particular the section relating to commercial litigation has substantial wording whited out.

THE CLAIMS OF MISREPRESENTATION AND/OR DECEIT

9.    I refute totally any suggestion of misleading or deceptive conduct on the part of GKI or myself and given copious proof that this is obviously the case, I view BC’s persistence with this claim to be particularly mischievous
10.    I am well known for a man who is a creative and refreshingly open & honest leader in business – certainly not led to deceit or dishonesty.
11.    I have been self-employed in business for over 15 years on the North Shore and I do a lot of charity work in Christian circles. In both the charity work, and from having done business over many years I have built a great reputation as a man of integrity, with a strong sense of justice and of being a man of my word.
12.    As I am the principal of GKI, my company also, is a reputable trading entity with high ethical standards, with very high client satisfaction. We have innovative & very competitive products. GKI has no need to stoop to misrepresentation or deceit in order to conduct a healthy business
13.    BC’s frequent assertions (13 etc) that GKI knowingly did something that it was not allowed to is ludicrous because even by a cursory glance at the many written communications from GKI it is clear that GKI believes that it has every right to trade openly and honestly with Bartercard members (“Members”), which indeed it does
14.    GKI states in its Terms and Conditions* that all business is conducted in writing. It is and has always been clear GKI policy to present all the facts to Members verbally, and in writing prior to commencing business with them. We have been scrupulous since leaving the membership. I contend that deceit usually works on the process of hiding relevant information. GKI conduct where every relevant fact is put in writing before business commences is neither deceitful nor is it misrepresentation.
15.    In making sure that I personally spoke to every Member wishing to do business with GKI and advised them that we were no longer members of BC, and then putting this in writing to every Member, there is little more that GKI can do to present the true situation. Short of perhaps asking the Member to sign a statutory declaration to the effect that they knew that GKI was no longer a member of Bartercard.
16.    When a Member sought GKI opinion on the validity of Members conducting business with a non-member, this advice was clearly phrased in such a way as to be my “opinion” or it was clearly a commentary and Members have made their own decisions on whether or not to do business with GKI or not.
17.    In assessing whether or not to do business with GKI any Member could quite freely talk to their BC Trade Co-Ordinator and make their own assessment of the legitimacy of doing business with GKI. The fact that many of them did actually do this and they all still came to do business happily with GKI reinforces the belief that business was open and honest. This is not a situation where a Member innocently walked into deceit with their eyes closed. The facts were discussed and out in the open.
18.    Even if it is later established somehow that a non-member (or an ex-member) cannot legally conduct business with a Member, there is still no misrepresentation by GKI or me. All that could be said is that I have simply found to be in error in my assessment of the situation, and this is certainly not deceit nor is it misrepresentation.
19.    BC Trading Rules & Regulations require that upon termination of membership, an ex-member “shall cease forthwith to hold themselves out as Members of BCNZ”. GKI has simply never claimed this nor even implied this to be the case.

CLAIM OF FINANCIAL LOSS

20.    There are several ways in which Members can and do circumvent the incurring of fees due to BC including (but not limited to):

a) Direct contra. This is where members are introduced to each other through the BC system, but then choose to exchange goods and services without informing BC of the transaction. Both parties gain benefit, but BC misses out on the fees due from both the buyer and seller on the transaction

b) Gift Vouchers, Scrip or Multi Trade Vouchers negotiated for a third party. This is where one member receives some form of Voucher and instead of “banking” it with BC instead passes it on to another member. Once again BC is denied fees which should have been incurred if the recipient had deposited the Voucher into their BC account in the correct manner, and

c) Direct Trade. This is where one Member negotiates a Trade payment to go from a Member who owes him a payment to another member who passes benefit on to the “middle-man”. Once again this practice denies BC of their rightful fees
21.    As with any business there can be different levels and degrees of “shady behaviour” ranging from the simple little “I’ll scratch your back and you scratch mine” which is generally overlooked by the BC “police”, through to the considered deliberate scam whereby one or more Members set about to deliberately avoid paying fees due. Quite often an ethical judgement is required on a case by case basis as business is conducted between Members, even without any attempt to deliberately avoid fees. This is because Members are generally creative by nature thinking outside of the square (that’s why they joined a “Trade” organisation in the first place) and they are also often dealing in more than one form of currency – many of them being in more than one “Trade” organisation at any given time.
22.    There are a number of different methods of implementing the above “techniques” to avoiding fees. For example a member can complete a voucher, sign it and leave the recipient blank, for the “middle-man” to pass on to whoever he choses. A Member can arrange for a creditor to pay a debtor and never see a transaction voucher and so on, but at the end of the day the method of payment is mostly irrelevant.
23.    BC invites Members to comment on what they call “Fair Trading”. BC in effect invites Members to “dob other Members in” who don’t play by the rules.
24.    While a business is a Member, BC has clear jurisdiction in these types of matters. Clause 12 of the Rules identifies the banned Trade Practices.
25.    As Mr Douse quite rightly explains, it is for a very good reason that BC’s Trading Rules and Regulations (“Rules”) prohibit this activity (in Clause 12) as Direct Trade by its very nature is undertaken for the prime purpose of circumventing the payment of fees which would be paid to BC if the “middle-man” processed the transaction in the normal manner.
26.    Obviously BC attempts to stamp out fees evading practices and has a simple process to “encourage” Members to conduct Fair Trading. Normally BC will send a letter to the Member indicating that they are aware of any business practice that is not acceptable, or BC will speak to the Member and encourage them to “Trade Fair”.
27.    BC has the right to terminate a Member’s BC membership at any time. Clause 24 in the Rules identifies this right. Of course this is in fact what BC did to GKI on or about 24 August 2000
28.    BC Claims to be missing out on fees due to them. If GKI was a member of BC this would be perfectly correct, but GKI was not a Member at any time that GKI conducted business with any Member mentioned in this evidence or hearing
29.    I assert that as a consequence of terminating GKI’s Membership:
a) The Rules now have no jurisdiction over GKI
b) GKI is now not bound by any internal BC “Fair Trade” conditions
c) GKI now has no contractual relationship to pay any fees to BC
d) No fees are henceforth due to BC from business conducted by GKI with any Members
30.    After having left Membership the business of GKI and other Members is between GKI and the Members. It now has nothing to do with BC in any way, shape or form.
31.    In particular the method of payment, the timing of payment, the amount of any payment and to whom the payment is made is not any business of BC

BC’S LOST OPPORTUNITY FOR FEE COLLECTION

32.    There is however another aspect that does have the potential to affect BC’s business substantially and that is the issue of BC’s lost opportunity for fees on sales occurring between GKI and Members, and I assert that while this is not particularly well presented in their statement of claim, this is actually the crux of BC’s perceived problem. It is not actually one of misrepresentation or fees actually due to BC
33.    In the normal course of doing business as a Trade Exchange there is one primary goal to greater business success – growth in turnover. BC calls this turnover Trade Volume (“TV”). It is the total combined spending between Members in any given period.
34.    TV is BC’s primary source of income and obviously the greater the TV the greater the fees generated
35.    There are basically two ways to create greater TV
i ) Increase the spending of existing Members, or
ii ) Increase the Membership numbers which on a law of averages will increase the TV
36.    It is the task of BC Trade Co-ordinators to facilitate and increase TV
37.    It is the task of BC sales people to increase Membership, which in turn assists the BC Trade Co-ordinators increase the TV
38.    When an active Trader (like GKI) is outside of Membership loop, BC misses out on the opportunity to earn fees from business conducted with its Members. BC does not miss out on fees actually due to it, rather BC simply misses out on the opportunity to collect fees – if in fact the supplier were a Member
39.    It may be disconcerting to BC to have their Members buying goods and services from an active trader outside of the loop. It may even be frightening for BC in that more people may wake up to the fact that it is actually perfectly possible to conduct business in this way, but I assert that conducting business in the way GKI has, is totally legal, morally sound and perfectly ethical regardless of whether or not a business like GKI was a Member or not and especially so in the case of GKI, given that GKI never initiated the termination of its account, and has four times tried unsuccessfully to become a Member again
40.    In attempting to claim that fees are rightfully owed to it, I contend that BC needs to prove that
a.    They were rightfully and legally entitled to those fees,
b.    That they would normally have received fees on the transaction in question or
c.    That we deliberately engineered business in a way to avoid fees
41.    From August 2000, GKI does not owe fees to BC because there is no business relationship that has existed between GKI and BC. BC has not asked for any agreement with GKI over the payment of fees. GKI has not offered any payment for fees
42.    BC is basically stating that they don’t want GKI to trade with their Members “end of story”. But I contend that if the Members want to trade with GKI, then they have every right to do this and so too does GKI have every right to trade with them
43.    With this claim BC is acknowledging that they have lost the opportunity for fee collection from GKI by terminating BC Membership and they don’t like the consequences. But that was their choice.
44.    Further, they have no grounds for fee collection until any fee collection issue has been prior negotiated with GKI, which they appear to not want to do

THE PRACTICE OF TRADING

45.    One of the biggest problems a “Trade” organisation has is that Members cease to trade. They often have too many Trade Dollars (“$T”) in their trade account, and nowhere to spend them. Whether this is real or not or whether it is a just a perception on the part of the Member doesn’t actually matter, because the end result is the same – that they stop spending, therefore cutting off the revenue streams to the “Trade” organisation.
46.    It is the role of the Trade Co-ordinator (“TC”) to seek out products and services that Members may wish to purchase. They will then locate and match suppliers who are willing to sell these goods or services in return for accepting $T in return
47.    Many Members have substantial $T in their account but have nowhere to spend it
48.    A further problem for BC is that when Members’ $T accounts are high is that they often attempt to sell to other Members and seek a proportion of $T and CASH. This is an attempt on their part to gain the business from a BC Member, but to minimise their burgeoning $T balance. BC policy is strictly “Full Trade or No Trade” and Members often have their membership terminated for this part cash and part $T trading
49.    A constant battle that Trade Co-ordinators have, is to locate good quality product from businesses who are happy to accept $T.
50.    With the plethora of Members who are supplying the retail or homebuyer, this can be relatively easy in the arena of personal spending. However locating companies that supply primarily to the business market and who are happy to trade in full is a lot harder, especially with larger ticket items.
51.    Most Members with large $T credits are always seeking opportunities to spend larger $T amounts, but only when it serves their business interests well, not so much for personal expenditure. Items like cars, computers, photocopiers, website services and so on are highly valued in a Trade organisation, and can command premium prices
52.    If the $T spent on an item actually helps increase the Member’s business (especially their cash business) then this is one of the smartest forms of $T spending possible and is actively encouraged by BC. Examples of this are purchasing advertising on $T, and of course Internet websites can be a very effective form of marketing
53.    GKI obviously provides a highly valuable product to Members. Offerings to Members from GKI have a high appeal. Our close rate to BC members is very high because:

a) Our product is very competitively priced
b) GKI has a unique system (Kwik-Az Updating) that permits owners of a website to update and maintain their own websites. It was New Zealand’s first Content Management System for entry level websites and is still a market leader)
c) We are active traders and are always ready and willing to receive payment in FULL TRADE
d) We are very accommodating and flexible when it comes to being paid. We often let our clients choose the method and form of payment that best suits them rather than demand a particular currency. (Being members of several “Trade” organisations, we will take payment for our offerings in almost any form, be it TradeCARD, BBX, Bartercard Gift Vouchers, Direct Contra, Goods or Services and so on)
e) We offer a unique “Pre-pay Package Deal” that is particularly attractive to Members where they can pay for their Design, Development and up to 36 months of Domain Name fees and monthly Hosting charges all at once. This allows Members to clear out a large value of $T in one “hit”, obtain tax advantage, and obtain marketing benefit to their business with nil cash expenditure.

54.    In the normal course of business, a BC Trade Co-ordinator would jump for joy at the possibility of a company like GKI accepting Full Trade, because, amongst other things, this would enable them to increase TV, supply valuable services to Members and reduce the $T balance of Members with too much $T with one simple larger ticket item
55.    However BC has consistently attempted to prevent GKI from trading with Members and refused to consider GKI’s interest in becoming a Member again. This has the net effect of
a.    denying GKI potential business
b.    denying BC TV and
c.    denying their members the opportunity to clear their $T and of course benefit from our competitive products and services

GIFT VOUCHERS

56.    In Clause 13 of Tony Dowse’s Brief of Evidence he states that the purpose of a Gift Certificate is “for where a member buys goods or services from a non-member”.
57.    Furthermore the use of Gift Certificates is promoted in the Bartercard Directory thus:

“Gift Certificates allow a third party to purchase goods or services at your expense from another member. Gift Certificates are simple and easy to use. The[y] are ideal for incentive plans, promotional prizes, gifts, payment for work carried out by a non-client etc . . .”

58.    This is in fact the exact same situation that BC is actually claiming to be a problem. There is absolutely no difference in these two stated purposes and what GKI has been doing – namely GKI (as a non-Member) is selling to Members and receiving payment by way of Gift Vouchers. If BC does not want Members to buy from non-Members, then they should neither promote Gift Vouchers to their Members nor even make them available and they should make it a condition on their Members to deal with only other Members – not take GKI to court for accepting Gift Vouchers
59.    I assert therefore that their perceived problem should be dealt with between themselves and their members – not GKI in a court of law
60.    Again in Clause 13 of Tony Dowse’s Brief of Evidence he states that Gift Vouchers are designed “for payment in a one-off situation” and he further emphasises this obviously important point with the words: “(I emphasise “a one-off situation”)”
61.    For such an important point to be emphasised by Mr Dowse it is therefore critical to clarify the vague terminology he uses, namely “a one-off situation”. This could mean one of many different things

a) That once a non-member business had received a Gift Voucher, they could then never receive another one
b) That once a Member had obtained a Gift Voucher for a non-member to use, they could not give any more to that same non-Member
c) That one-off means the above but within a specific time frame limit . . . and so on . . . so that “one-off” could mean no more than one a month or a year or whatever

62.    At no time has GKI been advised of this “important” rule. GKI has received no documentation regarding this. The Bartercard Directory does not contain and has never contained any mention of this requirement. Such a condition of Gift certificate use has never been agreed to by me nor any of my companies including GKI
63.    My companies and I have made extensive use of BC Gift Vouchers over many years and many of the non-member recipients have received repeated Vouchers, but BC has never once mentioned this important point
64.    BC restricts the supply of Gift Vouchers to $500.00 per member per month. Apart from this limitation and the obvious limitation of Members not using Gift Vouchers with other Members for the purposes of avoiding fees, I assert that there is not and has never been any criteria for a Gift Certificate to be used in a “a one-off situation” (whatever Mr Dowse’s interpretation of “a one-off situation” may be) and this claim has been totally fabricated

DIRECT TRADE

65.    I acknowledge and I have acknowledged openly in writing that Direct Trade between Members, has the clear consequence of denying BC its rightful fees.
66.    However when a person arranging for payment on behalf is not a Member, there is no such thing as Direct Trade. It is simply one business (a non-Member acting as a “middle-man”) arranging for a payment (from one Member) to another third party (another Member). As long as the transaction is documented for IRD purposes with a full GST invoice (which we always do) then this is a perfectly legal transaction.
67.    Once again fees are not due to BC in any way shape or form because the Member is effectively using his $T to gain benefit from a non-member. This is just simply smart business on the part of all parties.
68.    The issue for BC is more whether or not there is a loss opportunity to collect fees if the “middle-man” was a member, not whether fees are due or not from a non-member.
69.    As with the case of Gift Vouchers I assert therefore that BC’s perceived problem should be dealt with between themselves and their members – not GKI in a court of law
70.    To further highlight the fuzzy logic behind BC’s claim, I detail herewith the words from the Bartercard Directory entitled “Trading Tips – Paying your Creditors” in which BC promotes the use of $T to pay non-member creditors as supposedly “smart business”. Members are told this:

Have you ever thought of offering to pay all or part of your CASH debt to creditors in goods/services? If your creditor is keen to receive payment they may be open to accepting goods/services they can use in settlement of that debt.
You simply pay the Bartercard supplier on behalf of the creditor in Trade Dollars and then arrange for delivery of the goods or fulfilment of the service

For Example
A leather retailer was behind in paying one of her suppliers. To keep her supplier happy, she offered a one-off payment in products or services to the same value. Fortunately the supplier required signage at the time, which they would have had to find the cash for anyway, so they were accepting of her proposal. She co-ordinated and paid for their signage on trade in lieu of her outstanding invoice.

Benefits
* You save cash by paying your creditors in products and services available through the Bartercard system.
* Your creditor receives payment

71.    There is clearly no difference between business conduct that is promoted by BC in the BC Directory and that which GKI has undertaken – absolutely none. You could replace the leather retailer with GKI and the signage with a website and there is simply no difference
72.    The terminology “Direct Trade” is not used and cannot be used in the above Trading Tips promotional page because clearly there is a critical difference here – with Direct Trade all three parties are Members – with the business conduct promoted in the BC Trading Tips (and equally the business conduct of GKI) the “middle-man” (and in our case GKI) is not a Member.
73.    In Clause 57 of Tony Dowse’s Brief of Evidence he summarises the assessment I made to our client and Member 2001 Wetsuits in which I indicate that there is definitely no problem conducting business this way. He indicates that “in fact it is an issue for Bartercard”. It should therefore be an issue for Mr Dowse that his own company is actively promoting this very same business conduct. This is a practice that has actually been promoted by his company for many years and is still promoted by BC as good practice to this very day

ONUS OF RESPONSIBILITY

74.    I have been successful in conducting business over many years in both BC and other “Trade” organisations. As an active Trader, always ready to trade in full, my various companies and I have always been welcomed by Trade Co-ordinators and Mangers alike. This is however until I took BC to court in 2000.
75.    Throughout this court case, and no less than four other times after our successful hearing, I have consistently invited BC to resolve this matter amicably, which brings into question BC’s actual motives for undertaking court action
76.    In February 2001 a middle management representative from BC who had recently arrived from Australia to “sort things out” agreed with me it would be in everybody’s best interest to get GKI back into BC but this suggestion was apparently overruled by senior management
77.    On 12 June 2001 my lawyer Mike Tolhurst advised BC through their lawyer that I wished to re-establish BC membership and was unsuccessful in even arranging communication with a BC representative
78.    Upon transfer of the BC business to Mr Tony Falkenstein and others, I twice approached Mr Falkenstein with the view to burying the past, being pragmatic and “just get on with life” as a Member.
79.    After two cell-phone calls to Mr Falkenstein the end result was basically – “Tough! If the lawyers have a case, then let them carry on with it!”
80.    In January 2003 I made phone contact with Mr Dennis Orme of BC. I invited him to consider burying the hatchet and get pragmatic about the current situation. Mr Orme undertook to investigate the reason for continued court action against GKI and me, and again indicated that matters will be proved one way or another in court.
81.    For BC to cry foul over missing out on potential fees from an ex-member conducting perfectly legal business with their members despite a continued refusal to even want to discuss possible membership of an active trader is simply ludicrous
82.    It is clear that BC has perceived a problem with business being conducted with their Members but again the problem is that of them managing their own “Trade” organisation, managing or controlling their own Members, enforcing or communicating their Rules with their Members and is not the concern of GKI
83.    In fact BC has this very same situation to deal with on a regular basis when traders who are members of more than one “Trade” organisation choose to use their credit in an alternative “Trade” organization. While they would prefer their members to use their own “Trade” organization for conducting business, at the end of the day it is the prerogative of the Member how he will eventually conduct business. This is the same situation as when dealing with GKI.

LOSSES OR NOT LOSSES

84.    In addressing the issue of losses BC claims a loss of revenue through the sale of goods and services by GKI to Members.
85.    The crux of this claim is that if GKI was a Member then BC would have received fees on the transaction “to” and “from” GKI, not just the fees “from” one Member and “to” another member.
86.    In Clause 67 of Tony Dowse’s Brief of Evidence he uses a simple example which would have been a clear case of Direct Trade if GKI had actually been a Member.
87.    In fact using that same example that Mr Dowse uses, we can see that BC has actually received substantially more fees from these transactions that would have been the case if GKI had not conducted business with 2001 Wetsuits in the way that we did
a.    At the time that contact was made with Ron and Lynn O’Malley, 2001 Wetsuits was a member of two “Trade” organisations, BBX & Bartercard
b.    The introduction of GKI to 2001 Wetsuits was made by the then current TC for BBX, Tracey
c.    Tracey had previously established that Ron and Lynn were seeking help with a website
d.    Tracey called me and suggested that I get in contact with 2001 Wetsuits
e.    I phoned Ron and Lyn and established a relationship and presented options for their website
f.    I can’t recall the actual order of the discussions but I do know that in discussing the method and form of payment, Ron asked if we could share the cost over the two “Trade” organisations because he had more BC credits available and this was more of a problem for him to “quit” than BBX $T which was a lower balance at the time and less of a problem to him.
g.    I stated that I was very happy to receive payment using any mix between BBX or Bartercard that suited him
h.    In any event the purchase decision was delayed while the Member moved to new premises
i.    Upon recommencing business discussions, 2001 Wetsuits had become members of a third “Trade” organisation, TradeCARD
j.    Ron asked whether he would be able to pay us using a proportion of Bartercard and TradeCARD and again I was very happy to accommodate his wishes, and this suited the both of us perfectly
k.    In the final event this transaction was completed with part payment on TradeCARD and part payment with his BC $T and a part payment in contra.
l.    If GKI had not been able to receive BC $T, 2001 Wetsuits would most likely have purchased the website from GKI using 100% TradeCARD, or 100% BBX, or a combination of the two, a total contra (in which no $T or cash were exchanged) or even in the cash economy which would have left all trade options out of the business
m.    In this example, BC actually received fees “from” the selling transaction which they would never have received had we not been willing to receive BC $T from the Member
n.    Furthermore BC also received fees from the transaction “to” Duncan’s Canvas in the normal manner

88.    Equally in reverse, by preventing a Member doing business with GKI, TV is effectively reduced by that sale, and Members are disadvantaged by not being able to use their $T to purchase what they want. Sometimes this could be a considerable problem for a Member as in many cases it is simply not possible to get an equivalent product to the GKI, many times not at the same price, and certainly not on Full Trade
89.    BC calculates damages based on a possibility that on transactions where GKI has sold to their Members that they might possibly have received additional fees to what they did actually receive (i.e. if GKI was actually a BC Member). They claim damages based on this potential perceived loss.
90.    I contend that in fact BC TV was increased directly as a result of GKI sales to Members and that all business conducted by GKI has created an increased TV and has increased the fees paid by Members to BC. This is not just a theoretical possibility of fees that might come to BC (as BC’s claim is), this is actual real cash that is already in BC’s bank account as a direct result of GKI doing business direct with their Members
91.    It is BC’s claim that GKI misrepresented issues to its Members. It is GKI’s claim that BC instead is misrepresenting issues to the court
92.    In Clause 64 of Tony Dowse’s Brief of Evidence he asks a pertinent question relating to the theoretical devaluation of BC in the marketplace. He states “Members of the Plaintiff’s Trade Exchange could well ask the question, why should they pay a joining fee and continuing fees if entities such as the Defendants can simply engage in trade or business in this manner, with impunity”
93.    This is a pertinent question indeed, and I contend that this is actually the crux of the matter for BC because it indicates that it is really the market perception of BC that is the key to BC’s claim – nothing to do with misrepresentation, nor lost fees.
94.    But it is entirely up to BC to promote the benefits of Membership to their Members and the public in general. It is certainly not the care of GKI to be concerned with how BC markets or promotes itself, or what people perceive BC or BC Membership to be worth, nor for GKI to determine this value or otherwise to BC members or to BC prospects. GKI simply sells websites to people who want them and we are generally happy to take any form of payment that the client wants to negotiate. It really has nothing to do with GKI how BC is perceived in the marketplace.
95.    If BC chooses to terminate a Member’s membership and that ex-Member sells to Members as they are perfectly entitled to, and if the Members wish to trade with this ex-Member as they are perfectly entitled to, then it is up to BC’s marketing gurus to establish how they are perceived in the market place, not GKI
96.    BC perceiving a potential loss and crying foul is similar to Telecom crying foul because the Government let Clear Communications into the country. It is the role of Clear Communications to sell services to the public which they are perfectly entitled to do. Telecom should simply get smarter in their marketing, not just try to sue Clear Communications for simply conducting their own business with Telecom’s “previous” customers.
97.    Another example, which helps illustrate the shallow thinking of BC’s claims, is this: An employee is leaving the employ of a business that sells apples for a dollar each. On his departure the employer offers to pay him some of his holiday pay in kind. The employee leaves with a bundle of apples and gives them all to his children. They then set up a roadside stall and sell the apples for 50c each. The ex-employer has no right to complain that his business is being undermined. He cannot tell others to stop selling apples. He cannot complain that the ex-employee has any apples at all. He simply has to get smarter to encourage more business to himself. If he is smart he will also negotiate with the children to move their stall to another street, or offer them a commission to work for him. Almost anything would be smarter than trying to sue the ex-employee because his business may be devalued
98.    It is important to note that all clients of GKI wanted to do business with GKI. There are a wide variety of reasons for this (some mentioned previously) including our far superior product to that available from other Members, a strong relationship with me personally and so on.
99.    Rather than protecting the BC reputation, any undue pressure or negative influence on these customers and their relationship with GKI immediately devalues BC as an organisation in their Members’ eyes, and they tell me this. When Mr Olphert did his whirlwind trip to Auckland to try and gain evidence of misrepresentation on the part of GKI, I received calls from my clients informing me of this pressure, and the already poor opinion that many experienced members have of BC was devalued even further as they became indignant that BC should try and interfere in a perfectly good business relationship that they had with GKI
100.    There has been more actual devaluation of the BC name (since BC terminated GKI membership) inflicted by BC actions and attitudes than there is ever likely to be in 10 years of GKI selling to Members in an open and honest manner in the way that BC Members actually want – regardless of whether GKI is a Member or not
101.    Once again however, the issue is between BC and their Members – not GKI

THE PURPOSE OF FEES & COMMISSIONS

102.    The services provided to Members by BC are primarily funded by the collection of Fees
103.    While Members continually complain about the high fee charges from BC compared to other “Trade” organisations, BC does in fact provide services of measurable value to Members.
104.    Amongst other things, these services include:
a.    Referrals to and from other buyers and sellers
b.    Listings in the BC Directory
c.    Financial accounting and record keeping
d.    Trade Co-ordination services including locating required products and services

105.    Since August 2000, BC has failed to provide any of these services to GKI. They would not be expected to of course because no contractual relationship existed between BC and GKI. We were not Members after August 2000.
106.    Equally then, it is preposterous to claim that fees are owing when, not only have none of these services have been provided to GKI, but BC has deliberately set out to undermine GKI’s business relationships with its own customers who also happen to be Members
107.    GKI has a four tier commission structure ranging from Casual Referrals to a Referral Agency to a Dealer/Reseller/Wholesaler to a full Developer.
108.    In the absence of any agreement to become a Member, GKI has absolutely no problem considering an application from BC to be an official GKI Referral Agent. They will then receive commissions on referral business, but naturally BC would need to negotiate this contractual relationship before any agreement for fees or commissions would be agreed to – just the same way that all our other Resellers and Referral Agencies do. They would also need to agree to our terms and conditions in writing before commencing this relationship.

BARTERCARD’S UNETHICAL BUSINESS PRACTICES

109.    BC has repeatedly:

i.    Undertaken a concerted war of intimidation towards us through our clients,
ii.    Interfered with our natural business relationships,
iii.    Attempted to prevent us receiving remuneration that we were rightly entitled to and
iv.    Attempted to coerce members away from conducting business with us.

110.    Maxnet (Written proof from Maxnet that BC prevented them receiving Gift Vouchers from us)

111.    TruckSpares (Tried to prevent them getting Gift Vouchers from us)

112.    Furniture Solutions (Tried to prevent them getting Gift Vouchers from us)

113.    2001 Wetsuits (Tried to prevent them getting paid by third parties from us)

114.    Trailer Ace (Tried to prevent them getting Gift Vouchers from us)

115.    Cargo (Tried to prevent them dealing with us)

INJUNCTIONS

116.    BC seeks injunctions to prevent GKI and me trading with Members. Apart from the above (that calls serious question on the validity of any claims) there are real problems in implementing any such injunction

a.    GKI is a retailer, wholesaler and developer of websites. There are three applicable levels at which GKI has involvement with a client:
i.    The retail sale of a website – the retail entity that sells the end product to the client. This can be GKI but it is not always
ii.    The wholesale sale of a website – the wholesale production of the website which is then resold by the retailer – often GKI but occasionally is a remote Developer
iii.    The developer components – this is always GKI and includes DNS Services, Hosting, Mail Servers, the Kwik-Az Updating technology and so on
b.    To limit GKI or me in any business relationship would need in-depth clarification. At what point is GKI involvement permitted and what point is it not? What happens when a Retailer is a member of BC but can’t use GKI services? What happens if a retailer resells a GKI product to a BC Member? Can GKI no longer then provide and invoice a Member for a service that has been already sold by another party? The complexity is mind boggling!
c.    What would happen when a member was a cash customer of GKI, then joins BC?
d.    GKI has introduced many Members to BC over the years. Would these Members off limits or should they be an exception based on a previous business relationship?
e.    At what point is a Member a member to whom GKI cannot sell? How is GKI to know this? At what point does an ex-Member become “available” to sell to? How will GKI know this?
f.    How is GKI going to know when a GKI prospect is a Member? Does BC expect to provide GKI with a list of 5,000 members, and keep it up to date on a daily basis – then require GKI and staff to search through this list to identify whether or not it can do business every time GKI receives an enquiry?
g.    What happens when an existing Member who is also a GKI client of long standing wants to continue to do business with GKI? Do they have to resign membership in order to keep an existing business relationship with GKI?

117.    Apart from being unjustified, I contend that any injunction attempting to prevent GKI from doing natural business with Members would be fundamentally floored, unreasonable and unworkable

SUMMARY

118.    BC has claimed misrepresentation by GKI. We have instead demonstrated a clear commitment to open and honest communication in all matters relating to Members, without exception.
119.    BC has claimed that GKI is “not allowed” to trade with Members however we have instead demonstrated that it is the Members who have the ultimate say in who they do business with and that no contract no law prevents GKI from conducting natural business with Members
120.    BC has claimed financial loss as a result of GKI trading with Members. BC have not demonstrated any financial loss, but have instead hinted that they would have missed out on fees if GKI was a Member. We have in turn demonstrated that in fact TV (and associated fees) has increased as a result of our business with Members, although not as much as if we were Members
121.    BC has attempted to cry foul, but this is in spite of the fact they are the party who has behaved aggressively, unethically, and attempted to influence natural GKI business
122.    BC are the party who terminated our Membership and consistently refuse to even talk about reopening an account yet they now claim that they are missing out on fees, but they clearly don’t want GKI as a Member.

Bartercard commenced its life by way of a theft of its core system and Wayne and his three stooges took it to giddy levels milking it all the way. It started its life in crime and always has been a criminal operation. Those on the inside, like Paul, know this and in varying degrees the extent of the corruption. I know a bit too, well actually a little more than a bit. The important thing to me though is not that people stop it, or people from using Bartercard because it is evil or over-valued or run by conman, it is that people who deceive are exposed for who they are. Take those fig leaves off and see them for who they really are!

Thanks again for swinging by today!